higher after six months, and 7.7% higher after 12 months. Yet history may not always be the best guide. After all, stocks rose 6% in the year after the Fed started hiking rates in 1999, only for the S&P 500 to plunge dramatically in 2000 as the dotcom bubble burst. The outlook is unusually uncertain, and analysts are divided about what might happen over the next year. BMO's Brian Belski reckons the S&P 500 will surge to 5,300 by the end of 2022, as the recovery continues and Fed policy remains supportive, by historical standards. But Morgan Stanley thinks that it will be much lower, at 4,400 (2021, Robertson). Inflation continues to rise, and the Federal Reserve is expected to start taking action to combat it with a quarter-point rate hike in the next several days in March of 2022 according to some experts. This business article was written on March 15, 2022. Rising oil prices have created an even bigger inflation problem for the Fed, and they ultimately could be a big factor in determining the fate of the economy and interest rates. Inflation is showing no signs of letting up, as the Federal Reserve gets ready to raise rates. February’s consumer price index was up 7.9% year over year, the hottest since January 1982 and just above a Dow Jones estimate of 7.8%. The gain was due to broad-based price jumps in areas of basic needs for consumers — food, fuel and shelter — and it comes as the war between Russia and Ukraine rages on, continuing to drive energy prices higher. Some economists expect inflation to rise even more going forward. But, even with the uncertainty surrounding the war, the Fed is expected to move forward with its first-rate hike next week in a bid to curb inflation before it becomes too entrenched. The Fed took its fed funds target rate to zero in early 2020 to fight the pandemic. However, the central bank also faces the risk that higher interest rates and high inflation — particularly from energy prices — could create a drag on growth. That means the central bank could have to slow the pace of hiking to prevent a recession. The Fed’s first-rate hike is expected to be a quarter-point, or 25 basis points. Each basis point equals 0.01 of a percentage point. Meanwhile, gasoline in
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